Editor's note: This tour of small businesses across the country highlights the imagination, diversity, and resilience of American enterprise.

At 9 a.m. precisely, assistant manager Ryan Olenick unlocks the front door of The Garment District, bracing himself for the onslaught. The first few customers--gray-haired and lightning fast--sprint up the stairs into a rose-colored room that looks like the set of a David Lynch movie. They hurtle past the mammoth statue of a rearing silver horse, beneath the space-shuttle carnival ride, and head for the back wall, where a metal trolley is heaped with shoes.

As they cram footwear into garbage and tote bags, more people swarm in behind them, until the crowd around the trolley is three rows deep. Several people peel away and start attacking the 600-pound bales of used clothing that stand upright nearby. The other customers soon join them, tearing at the bales until they are thigh deep in sweaters, shirts, and dresses.

"It's kind of like a schoolyard sometimes," says Olenick. "They fight. Someone says, 'I found this first!' but they can't prove it. I say, 'If you guys are going to argue, then it's mine.'"

So go Saturday mornings at The Garment District, a 50-employee "alternative department store" in Cambridge, Massachusetts. On Friday evenings, staff clear leftovers from the dedicated space where apparel sells for $2 per pound and set out two tons of fresh items, compressed into bales by a hulking steel machine in back, for the store's "By the Pound" department. After the initial stampede, customers settle in among the piles for hours, picking over each individual blouse and jacket. Many of the people are from Haiti or other Caribbean countries. They send everything back to their families, who resell the clothes there.

Others nesting among the deconstructed bales are more typical of the clientele that shops The Garment District's second floor for stylish used clothing. The store--in a two-century-old former soap factory with a bright pink stripe painted round the base--abuts MIT and is just over a mile from Harvard. "College students don't have a lot of money," says Chris Cassel, a 25-year veteran of The Garment District and its current president and co-owner. "So we have this interesting mix of people buying affordable fashion for themselves and businesspeople who are wholesaling it back to their countries."

Contemporary clothes are The Garment District's biggest sellers, but it also moves lots of vintage stuff, which it displays on racks according to decade: '60s, '70s, '80s, '90s. Local theater companies love it, and movies shooting in Boston--such as Black Mass, the recent Whitey Bulger flick--stock up on era-appropriate clothing here. So do some television shows, notably The Colbert Report, which rented several times from the store's vast costume department. "They got the Gluten-Free Beaver from us," says Cassel.

As iconoclastic now as it was 30 years ago, The Garment District is the secret that erstwhile hipster parents pass on to their current hipster offspring. "What we do is different and unique," says Cassel. "I am never going to compete with Amazon or someone who can manufacture super-cheap in China. But what can I do? I can sell something no one else has."

From (literal) rags to riches

Cassel, 50, has shoulder-length hair and is wearing a pink-and-black check shirt, a color scheme similar to that of The Garment District. Sitting in his fourth-floor office surrounded by historical maps of Cambridge, he talks about the days before this neighborhood was transformed by foodie watering holes and pricey new developments. "When I started in 1990, we were the only business down here, and it was a little scary at night," he says. "There was a scar on the side of the building from people lighting fires in the alley for insurance money."

The Garment District's progenitor was Harbor Textiles, founded after World War II by entrepreneur Leon Cohen. Harbor Textiles bought used clothes in bulk and cut them into rags for industrial customers. In 1979--two years after the movie Annie Hall pumped new vigor into the old clothes market--Cohen started separating out less-worn items from his raw materials and selling them on weekends for $1 a pound. In 1986, "Leon realized he could make more money if he took over the second floor and sold clothes on hangers like a traditional retail store," says Cassel, who came on board after several years working in the back rooms of Harrods. Cohen's son Bruce oversaw the metamorphosis of By the Pound into The Garment District.

What differentiated The Garment District from the beginning was its selectivity. Unlike thrift and charity stores, the business actively sought out in-demand styles. In the early '90s, Cassel was among the young employees who frequented clubs, bars, and concerts, taking note of what people wore and comparing that with sales data from the store. They asked wholesalers for popular styles and started a consignment program, choosing carefully from the laundry bags full of clothing people brought in to sell. "We had a lot of trench coats. Cowboy boots were big," says Cassel. "Back in the day, everyone wanted black, so we used to send things out and have them dyed."

Later the store switched from consignment to a purchase model, buying outright the harvest from local people's closets and attics. It also bought clothes from charities. But most flowed in from the wholesalers, many of the same companies that had supplied the early rag trade.

Cassel, who by then was the general manager, installed what he calls a "primitive" computer system, which revealed that the store was getting a lot of Halloween shoppers. Sales of vintage clothing spiked in October because "people wanted to go as a decade: disco or a hippie," says Cassel. In response, he created a costume rental and sales department, stocking it with the farthest-out fashions that walked through the door. "I could sell a '50s dress to someone who just wanted something distinctive to wear out for the night or to someone going to a themed party," says Cassel. "It gave us more options for the same clothes."

Cassel and four partners--three of them Garment District veterans--bought the store from Bruce Cohen in 1999. Six years later, the business faced imminent demise when Bruce Cohen, who still owned the land, was approached by a developer who wanted to build high-end condos on the site. A two-year court battle ensued.

The City of Cambridge rallied round and eventually struck a very Cambridge-like deal whereby Cassel could buy the building if he sold off the parking lot for affordable housing. "There's a lot of need in this city, which went from a working-class community to everything that is near the universities being very expensive," says Cassel. "So it had a very positive, good ending."

You can never have too many bunny heads

It's late afternoon on a Friday, and The Garment District's second floor is still humming. In the big back room, painted blood red and overseen by two giant faux-Greco-Roman statues, two women are perusing a rack of flowy '70s blouses, while a third--in a mini-dress resembling a mermaid's tail--inspects herself before a mirror.

Michele Harris, a regular who lives in nearby Inman Square, is shopping for handbags because she's going on a trip. She's already scored two, a practical, cross-body number and a frivolous-but-charming rosebud-shaped purse, plus a pair of gently used designer gloves. "I'm a vegetarian, but they're not genuine leather," says Harris. "Although I'm OK with buying leather secondhand."

Katie Bartel has been visiting The Garment District once a month for all four years she's been at MIT. Today she's here with a friend who didn't want his name used but was chuffed to find a $13 vest for a semi-formal party. "Usually I'm looking for something pretty ridiculous, like this tweed jacket," says Bartel, indicating the snug tailored garment she just bought and is already wearing. "It's a great selection and it's pretty cheap."

Cheap it is. Individual items sell for an average of $10 to $12, and even if you've got half that amount you won't go home empty-handed. (Markup is roughly three times cost of goods.) As for the selection, it changes constantly. Ten employees examine roughly 10,000 garments a week from all sources, of which about 20 percent ends up on hangers. More is diverted into By the Pound. "I look for vintage and fun stuff that I think people will buy very fast for parties," says Nick Bunch, an employee who often meets with individual sellers. "Giant jean jackets that look like they were in a music video from 1993. Cool hooded vests. Sometimes someone says, 'My mom made this dress.' And I'm like, 'Are you sure you want to sell this?'"

Clothes that come in through wholesale but fail the fashion test or that are left begging in By the Pound are resold to other countries or to stores around the United States. "If it is not good enough for the hipsters in Cambridge, there are other people who want it somewhere else for a cheaper price, if they are good-quality clothes," says Cassel.

About a third of revenue comes from costume sales and rentals. In 2008, The Garment District acquired a local business called Boston Costume. Now, instead of a few flapper dresses and disco jumpsuits, the store stocks virtually every creature, critter, and character imaginable. More than 100 large mascot heads stare down from the tops of beams where they are arrayed: Bigfoot; the Minotaur; an elephant, moose, and kangaroo; multiple variations of bears and lions; and The Garment District's mascot, Rags the Cat.

"The holiday guys are really happening now, like the snowmen," says store manager Amy Gibson. "We'll probably rent out 80 or more Santa suits this season. We keep the bunnies over here: We have about 90 that we'll rent to malls at Easter. They're pretty creepy when they're all stacked up."

Though still big, costume sales have tapered off some since the advent of internet shopping. The temptation is powerful to type your dream costume into Amazon and have it at your door in two days, Cassel concedes. The Garment District can't compete with that. E-commerce isn't viable for a business that traffics in thousands of one-of-a-kind items and an inventory constantly in flux.

But Cassel remains optimistic. "When we reach the point where people can manufacture exactly what they want, then we will be at risk," he says. "For now, this is where you shop if you want to find your own style."